COVID-19 AND US ECONOMY

The world has been exposed to lots of epidemics such as Sars Viruses, Spanish Flu until now. However, the Covid-19 is different consider to past epidemics, because there is a sight that it will take more time to spend in worldwide. Hence its impact on the economy will be more dangerous. We’ll examine three possible scenarios for Covid-19’s impact of the USA’s economy consider the duration of the epidemic. Today’s date is May 13, 2020, and Covid-19 has existed in America since January 2020. So, let’s tackle the Covid-19 impact of the USA’s economy consider the epidemic will stay more than three months, six months, and one year.

First of all the USA had been already started aggressive political, economic, military strategy by Donald John Trump, chairman of the USA, when the Covid-19 Epidemic started. Especially, we can say that there was an economic war between The USA and China. There were lots of ways to maintain this war but the most efficient way was using the private sector. We have seen that technology industries’ war among Apple and Huawei. Besides,the USA was not ready to handle with epidemic’s consequences because of Donald John Trump’s aggressive political and economic strategy. He has just focused that being number one and he has decreased his economic precaution. The USA had an unemployment rate with 3,87 percentin 2019 but when we look at new data, it increased to 14.7 percent as of April 2020. Companies faced with the supply of employees and government caught off guard to help the private sector. So they have searched for layoffs, unpaid holidays, job sharing, demotions, restricted hiring policy etc.. On the other hand we are in the second quarter in fiscal time and current GDP growth rate is %-4.8, consumer confidence point is 71.8 (below China’s point 112), business confidence is 41.5(below China’s business confidence, 50.8). So we can say that the USA fell back in the economic war according to China during Covid-19’s period and if it will stay more than three months in the world, the USA’s economy will get worse %5-10 in all economic indicators nearly consider to our statistics because each one connected.

Donald Trump and Xi Jinping. Photo: Kyodo News.

Second, let’s tackle if the epidemic will stay for more than six months. Researches about statistics have mentioned that the USA’s income consists of manufacturing, international business transaction, services, industrial production, business inventories, corporate profits, stocks exchanges, weapon sales, etc. The USA has plenty of global company and all of them need to communicate, marketing, and do sales worldwide. If we think that these global companies’ importance in terms of government, they are paying lots of taxes, they have to help the government because of international ethics, international accountability standards, etc. If they no exist, the government gets into trouble. So, countries that have plenty of global business transactions such as the USA, China will get worse consider to other ones at the period of Covid-19. If epidemic will stay more in six months in the USA, global private companies, government’s global business transactions, tourist arrivals, government global businesses, exports and imports, corporate profits, inflation rate, retail sales, industrial production will get trouble and effects of the Covid-19’s impact on the USA’s economy will be double.

People wait in line to get care packages with food donations from the Food Bank for New York City in Brooklyn on 15 May. Photograph: Alba Vigaray/EPA

Thirdly; consider the last scenario, if the epidemic will stay more than the one-year government will seize the some multinational companies‘ entities (expropriation) or it will force the sale of their entities’ to locals or it will increase its external debt. Until now, Donald Trump has given the order for printing money for the recovery of the economy. I think that some of the MNE companies will suffer from Donald Trump’s desperate methods. On the other hand, the USA’s health care system has already been below the average and it will get worse. The number of equipment is decreasing, health care employees are suffering from lots of working stuff. Hence, the government has to foster its employees with cash. Therefore, we can say that if the epidemic will stay more than one year in the USA, we will focus on the survival of the government rather than economic terms. So, the government will mainly deal with how it can maintain its activities. Also, it is possible that D.Trump may give up on economic recovery.

REFERENCES:

[1] www.statisca.com

[2] https://tradingeconomics.com/united-states/indicators

[3] www.bea.gov

[4] https://www.npr.org/sections/money/2018/08/17/639659490/donald-trump-s-economic-strategy-maybe

[5] https://data.worldbank.org/country/united-states

[6] https://www.theguardian.com/us-news/2020/may/05/donald-trump-coronavirus-economic-recovery [7] https://www.economy.com/united-states/indicators

Buğra Erdinç
Hacettepe University, Department of Business Administration.
Posts created 3

Leave a Reply

Your email address will not be published. Required fields are marked *

Related Posts

Begin typing your search term above and press enter to search. Press ESC to cancel.

Back To Top